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Designing Your Organization toMeet the Challenges of aDisruptive Future

Overview

Business leaders are losing sleep because change is occurring at anunprecedented rate—disrupting every facet of business and making

competition a test of the fittest on a global scale. Organizations face a variety ofexternal concerns, including an ever-changing geopolitical climate, economiccomplexities, emerging technologies, and fierce competition. Internal issues, suchas productivity, employee wellbeing, and the need to maintain a steady talentsupply, wreak their own havoc. All of these changes point to a need fororganizations to adopt a much more flexible organization design (OD) andstructure—or else risk falling behind in the marketplace.

In effect, the future of work is colliding with today’s businesses—and not just onone level. Across all sectors and geographies, regardless of size, the organizationas a whole must be capable of innovation, adaption, and speed. And organizationdesign is key. Drawing on Bersin’s High-Impact Organization Design research1, thisarticle explains the importance of organization design and sets the groundworkfor designing a high-performing organization that can navigate external andinternal business environments.

In This ArticleFinding flexibility in organization structureaThree guiding criteria for organization designaHigh-level issues to consider before redesigning an organizationa

Copyright © 2019 Deloitte Development LLC. All rights reserved.Not for distribution. Licensed material.

RESEARCH ARTICLE

David Mallon, Vice President & Chief AnalystBersin, Deloitte Consulting LLP

Timothy Davis, Senior Research AnalystBersin, Deloitte Consulting LLP

Copyright © 2019 Deloitte Development LLC. All rights reserved. Not for distribution. Licensed material.

Designing Your Organization to Meet the Challenges of a Disruptive Future

Say Yes to Flexible OD: Become an AdaptiveOrganizationIn a business world in which every decision is measured, analyzed, andquantified to reduce waste of resources and effort, many organizationsare turning to new technologies to help them remain competitive. Fromworkforce ecosystems (including both gig and no-collar workforces) topredictive analytics and pervasive computing, many organizations arefundamentally changing how they operate in today’s always-on businessenvironment. Adaptability is the new imperative.

While important, however, this almost single-minded focus on keeping upwith the changing marketplace is causing new pain points fororganizations. Often, they realize that their existing models of leadership,decision rights, work design, and legacy processes are not flexible or agileenough to keep up with—let alone get ahead of—the fluid markets inwhich they struggle to compete.

Companies are beginning to recognize that they should build flexibility intotheir organization design. As such, forward-thinking executives now lookto new management structures and more adaptable processes. Thisencourages leaders to adopt more flexible, team-based approaches tohelp companies adapt new technologies and methods more efficientlywhile maintaining their core business competencies.2

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KEY POINT: In today’salways-on businessenvironment, adaptabilityis the new imperative.



From Strict Structures and Rigid Processes toFlexible Organization DesignsOne of the greatest pain points many organizations face today is the lengthof time it takes to respond to changing business conditions due to thestrict, top-down decision-making process that their current structuresimpose.

Because hierarchical structures require that key decisions be run up thechain of command before an answer is delivered, businesses relying solelyon this type of management model are often slow to respond and oftenfind themselves lagging behind their more flexible competitors. Incomparison, adaptive companies that create flexible organization designsare better equipped to diffuse information to important members,support teams that need to perform, and make agile decisions (see Figure1).

Organization design can address these issues by fundamentally changinghow management structures and processes work. Remember thathierarchies are with us because they enable scale, consistency, andefficiency—but historically, they can also reduce responsiveness andagility.3 Organizations can address these issues by:

Being more mindful of their design choices•Using structures that are fit for purpose•Approaching decisions related to workforce, work design, decision•rights, and rewards systems with an eye toward allowing individualsand working groups to take ownership of time-sensitive decisions

Remember also that you can effect change within existing hierarchies,adding support for adaptability without necessarily replacing theunderlying structure. It all depends on the balance of efficiency versusadaptability desired and the appetite and support for larger change.

Figure 1: Current State versus Future State of Organization Design

Source: Deloitte Development LLC, 2018.

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KEY POINT: Adaptivecompanies that createflexible organization designare better equipped todiffuse information toimportant members,support teams that needto perform, and make agiledecisions than those thatrely solely on hierarchicalstructures.



Design Traps: Emerging Trends in ODOrganizations need to design flexibility into their structures and encouragecommunication across departments. Generally, businesses should bemore mindful and intentional with their organization design—incorporating a broad and systems-oriented perspective. Before starting,however, you should understand your organization’s aspirations,motivations, and objectives, as well as related relationships andaccountabilities with key stakeholders.

OD decisions should be made in keeping with the business strategy.Organizations that fail to ask how the former supports the latter can fallinto common design traps. We believe that companies considering suchstructures should think about why they want to redesign their businessand what they hope to accomplish before embarking on any radicalreorganization plan.

For example, organizations commonly mix structure and the pursuit ofbeing flatter as the purpose or end game of OD. Being flatter can havebenefits in the context of an organization’s strategy, but when done out ofcontext or for the wrong reasons (e.g., chasing cost efficiencies), it cancreate more harm than good. Considering these guidelines can helporganizations better position themselves for adaptability when gettingstarted with OD.4

To help address these questions, we believe companies need to considerthree main points:

Design for fit—not just for flat.•Are you trying to flatten your organization because it’s the-trendy thing to do, or do you have a legitimate reason to adopta new structure? Does it fit the need / purpose for differentparts of the business?Consider your organization’s aspirations and the value you think-a new structure—along with practices, models, and adaptableprocesses—can provide before changing just for the sake ofchange.Structure is important, but consider informal networks in design-analysis and decisions as well. Think about the whole design ofyour organization as both a formal and informal process.

Design for flow. “Designing for flow” is not always about trying to•make people faster or more agile. Rather, “designing in the flow” isabout understanding what conditions or environment may beneeded for your strategy to succeed and then creating a flexibledesign strategy that promotes flow. For example, Bersin’s High-Impact Learning Organization research5 finds that matureorganizations are more likely to focus on creating conditions forproductive learning instead of merely relying on the content of theirlearning platforms. Mature learning organizations accomplish this byfocusing on outcomes, using data to guide decisions, and promotinga culture that celebrates learner curiosity.

Think about how a new management design can help your-organization break down existing barriers and silos, in additionto promoting the free flow of talent and knowledge /

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KEY POINT: Beforebeginning to revamp yourorganization design,understand yourcompany’s aspirations,motivations, andobjectives, as well asrelationships andaccountabilities with keystakeholders.



information across various projects encompassing all parts ofthe organization.Can creating a more fluid organization help your company more-quickly adapt to changes in the marketplace and maintain itscompetitive advantage?

Design as a process, not a project. Organizational flexibility is the•key. The idea of an adaptable organization represents afundamental shift in operating and management philosophy thatenables large-scale global organizations to operate with a start-upmindset and drive modern people practices that enable enterpriseagility through empowered networks of teams. If the only trueconstant is change, then organizations considering new models forthe design of work, the workforce, leaders, decision rights, andreward systems should incorporate a design that will allow them tokeep changing with the market in which they compete.

Organizational change should move away from being only a-“one and done” project; companies that learn to seeorganization design as a set of always-on practices can developadaptable processes that will help them minimize—and possiblyavoid—highly disruptive and expensive reorganizations.If your organization can accept that the marketplace no longer-operates in a steady state, then you can gain a competitive edgeby designing a new, fluid OD and flexible processes that canadjust to changing conditions.

ConclusionWhile there may not be a “right design” for your organization, we do believethere is a “right design mindset” or perspective.

Every business is different—what works for one organization may not beideal for another. As such, the most critical considerations to keep in mindwhen starting any restructuring are to:

Determine why you are undertaking the project in the first place•Decide on the goals you hope to achieve when you are finished•

Understanding the underlying principles of mobility and accountability canbe useful in helping organizations develop the practices, models,approaches, processes, and structures that can help drive their futurethinking and success.

Bersin continues to explore high-impact organization design, which canhelp outline ways in which businesses can address these issues anddevelop a plan to create a more dynamic, fluid, and agile enterprise thatunlocks the adaptable organization. We plan to release more of our High-Impact Organization Design research6 to help guide your organization onits OD journey. So, stay tuned!

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KEY POINT: Companiesgetting started withorganization design shouldconsider three maincriteria: design for fit,design for flow, and designas a process.



Key TakeawaysAOrganizations face new challenges to stay competitive in•today’s fast-paced, technology-driven marketplace.Be mindful of your design, and don’t just chase flat—think•about fit and your ability to adapt when needed.While there may not be a right design, Bersin believes there’s•a right design mindset.Regardless of how structured or unstructured you want to be,•design to increase flow of people, talent, and knowledgearound the organization.Change the environment itself to make adaptability easier.•Organization design decisions should be made in alignment•with the business’s strategy.There is no such thing as a steady state anymore—think of•organization design as an ongoing process or a set ofcontinuous practices.

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Endnotes(1) High-Impact Organization Design research, Bersin, Deloitte Consulting LLP, 2018; (2) Please see the IMPACT 2018 presentation,1.Designing Digital into the Organization: Early Findings from the 2018 Bersin High-Impact Organization Design Study, Bersin, DeloitteConsulting LLP / David Mallon, 2018.(1) Unlocking the flexible organization: Organizational design for an uncertain future, Deloitte Development LLC / Trevor Page, Amir2.Rahnema, Tara Murphy, and Tiffany Mcdowell, 2016, https://www2.deloitte.com/global/en/pages/human-capital/articles/gx-unlocking-the-flexible-organization.html; (2) The Adaptable Organization: Harnessing a networked enterprise of human resilience, Deloitte DevelopmentLLC / Amir Rahnema and Tara Murphy, 2018, https://www2.deloitte.com/global/en/pages/human-capital/articles/the-adaptable-organization.html.“7 truths about the organization designs of the future,” Deloitte Consulting LLP / Tiffany McDowell, November 19, 2018,3.https://capitalhblog.deloitte.com/2018/11/19/a-prediction-7-truths-about-the-organization-designs-of-the-future/.“7 truths about the organization designs of the future,” Deloitte Consulting LLP / Tiffany McDowell, November 19, 2018,4.https://capitalhblog.deloitte.com/2018/11/19/a-prediction-7-truths-about-the-organization-designs-of-the-future/.(1) Eight Top Findings That Drive Learning Organization Maturity, Bersin, Deloitte Consulting LLP / Dani Johnson and Elizabeth Barisik,5.2017; (2) Factors and Dimensions of the Learning Organization Maturity Model, Bersin, Deloitte Consulting LLP / Dani Johnson andElizabeth Barisik, 2017.High-Impact Organization Design survey, Bersin, Deloitte Consulting LLP, 2018.6.

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https://www2.deloitte.com/global/en/pages/human-capital/articles/gx-unlocking-the-flexible-organization.html

https://www2.deloitte.com/global/en/pages/human-capital/articles/gx-unlocking-the-flexible-organization.html

https://www2.deloitte.com/global/en/pages/human-capital/articles/the-adaptable-organization.html

https://www2.deloitte.com/global/en/pages/human-capital/articles/the-adaptable-organization.html

https://capitalhblog.deloitte.com/2018/11/19/a-prediction-7-truths-about-the-organization-designs-of-the-future/

https://capitalhblog.deloitte.com/2018/11/19/a-prediction-7-truths-about-the-organization-designs-of-the-future/

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Publication Date: February 6, 2019

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